With the Ahmedabad-based Indian conglomerate being seen as becoming “too big to ignore”, foreign institutional investors or FIIs increased stake in 6 out of 10 Adani stocks in the March quarter. The patience of PSU insurer LIC in holding Adani stocks despite the political controversy also paid off with the market value of its holding going up by over $1 billion in Q4.

During the quarter, FII ownership went up by 26 bps to 14.98% in Adani Ports. Adani Green Energy and Adani Wilmar also saw a rise of 12 bps each in FII holding. Other stocks in which foreign ownership rose quarter-on-quarter are Adani Power, Adani Total Gas and NDTV, shows data pulled from ACE Equity.

Mutual funds were seen raising bets on ACC, Adani Enterprises, Adani Green Energy and Adani Power. Retail investors, on the other hand, seemed to have booked profits in all stocks of the conglomerate barring Adani Energy.

So far in the calendar year, the group’s cash cow Adani Ports has been the biggest gainer in the pack with a year-to-date return of about 31%.

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LIC in the house of Adanis

India’s largest domestic institutional investor LIC, which owns 7 Adani stocks in its multi-billion dollar portfolio, reduced stake in both cement stocks. While the ownership went down marginally in case of ACC, LIC sold a 60 bps stake in Ambuja Cements during the quarter.

The value of LIC’s investment in 7 Adani companies has soared from Rs 52,779 crore at the end of the December quarter to Rs 61,660 crore now, a rise of nearly Rs 8,900 crore.

In the entire FY24, the value of LIC’s holding has increased 59% or Rs 22,378 crore despite trimming of holdings during the year. In value terms, Adani Ports and Adani Enterprises are among the biggest bets for LIC within the conglomerate.

State-owned LIC’s stake in Adani companies was at the centre of a political slugfest last year after a report by US-based short-seller Hindenburg alleged stock manipulation and accounting fraud by billionaire Gautam Adani.

At one point, Adani stocks had lost about $150 billion of its value only to make a comeback on the back of debt reduction plans and robust profit growth across its diverse businesses.

In the year since the Hindenburg report, Adani has cemented its status as India’s premier and leading infrastructure conglomerate, with a laser focus on spearheading the nation’s green energy transition alongside a formidable presence in critical sectors such as airports, ports, data centres and roads.

Earlier in the year, US brokerage firm Cantor Fitzgerald had initiated coverage with overweight rating on Adani Enterprises and argued that the group had become too big to ignore.

Despite being the 10th largest non-financial stock in India, Adani Enterprises virtually has no analyst coverage.

“To that extent, we believe much of what the investor community knows about Adani has come from a short report published in early-2023. While that report brought to light serious concerns, we believe the company has taken actions to reduce liquidity risk (from share-backed loans), improve governance, and increase transparency. Thus, at this juncture, we believe Adani is too big to ignore, and for India, we believe the country needs Adani as much as Adani needs the country,” Cantor analysts Brett Knoblauch and Thomas Shinske had said.

(With data inputs from Ritesh Presswala)

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